Babies are adorable, sure. But they're also extremely expensive—especially given how quickly they outgrow clothing.

After their kids grew out of countless outfits, two busy Chicago-area moms decided to take matters into their own hands. They launched Moxie Jean in 2011, a site that lets customers buy gently used kids and maternity clothing at big discounts.

"I have three kids, and I had piles and piles of clothes in my closet that they had outgrown," said Sharon Schneider, who co-founded the company with her sister, Sandra Pinter. "They were in perfectly good shape, and I thought, I don't have time for eBay or Craigslist. I need an easy service to get this out, and so that was the genesis."

Brad Quick | CNBC

Workers in the Moxie Jean office sorting clothes before they are listed and sold.

Moxie Jean completed the TechStars Chicago program in 2012 and has raised $1.33 million in funding.

Families that have kids who've outgrown their clothes can order a free Moxie Jean mailer bag to fill up and send to the company, which then sorts through the items to see what they can accept to sell on their site. Moxie Jean pays customers outright for anything they accept, between 50 cents and a few dollars. From there they steam it, hang it up and photograph it before putting the items for sale on their site. Schneider said about 60 percent of items sent in are accepted to be sold on the site.

"They provide the raw material, we put in all the labor, and then people pay for what is guaranteed to be an excellent-condition [item] delivered to your door, rather than taking the time and effort to go to garage sales or shop on eBay," Schneider said.

Moxie Jean also sells maternity clothes, as babies aren't the only ones quickly outgrowing items. Between the baby, kids and maternity clothes, Moxie Jean has about 50,000 items for sale online, for between 50 to 75 percent off the retail price.

"Every time you buy gently used instead of buying new, you're saving 500 gallons of water to make just one cotton T-shirt."-Sharon Schneider, co-founder of Moxie Jean

Before co-founding the start-up, Schneider worked as a philanthropic advisor with large private foundations and decided to call it quits in 2011 when Moxie Jean actually had only one paying customer. Originally, they had a Netflix-esque model, based on subscriptions for baby clothes, which didn't quite take off.

"After six or nine months, we still only had about 35 paying customers, so we made the decision that model wasn't really working," she said. "We switched to a straight-up resale model and relaunched the website and changed our name. Within six weeks we had five times as many customers."

Today, Moxie Jean is growing between 10 and 20 percent per month, with more than 20,000 families buying and nearly 10,000 selling. Aside from just saving cash, Schneider said customers are attracted to the environmental benefits.

"Families want to be more socially conscious," she said. "They want to be more green and practical at the same time. So buying gently used clothes reduces not only the strain on your wallet but the strain on the environment as well, because so much goes into making these clothes in the first place. Every time you buy gently used instead of buying new, you're saving 500 gallons of water to make just one cotton T-shirt."